Whether you are planning to launch a new online store, new product lines, or an entirely new business, you need to know who your target consumers are and how to reach them.
These seven questions will help with that understanding.
- Why do customers buy from you and not a competitor?
- How often do they shop for the type of products or services you sell?
- Do they prefer to buy online or in a physical store?
- How price tolerant are they?
- Are they influenced by fashion, price, and free shipping?
- Do they shop using search engines, comparison-shopping sites, or because of social media referrals?
- Are your products “must have” or simply “nice to have”?
The answers to those questions and many more should help you determine your marketing and sales strategies.
Market Segmentation and Targeting
Before you seek to understand your customers, however, start with knowing the overall size of the market for the products you are selling. It will help you identify your real target customer if you look at the total market.
The next step is segment the market into similar buying groups. Look at submarkets by age, income, gender, location, or any number of other approaches. For example, if you are selling cosmetics, the teen segment, 20-something segment, and over-50 segment are different in their desires and their shopping habits. It may be difficult to acquire customers in any of those market segments if you try to attract all customers with one online store or product line.
The goal with market segmentation is to group potential buyers into a segment that is likely to have similar buying tastes and habits. Even that can be challenging. But there is a lot of free information on the Internet. You can also evaluate competitive sites already selling into those markets by analyzing their demographics, traffic, and the types of search marketing strategies that they employ. I’ll discuss that later in this article.
Once you have identified discrete market segments, select one or more target markets to pursue. This process includes understanding what products those consumers are seeking, how they will shop, how much they are willing to pay, and so forth.
Your target market will determine your products, site design and advertising strategies. I’ve always been a fan of niche stores that are very tightly aligned with a specific target market, but you can also set up different shops within a larger store to accomplish the same thing.
How To Gather Customer Information
A survey is a good way to gather information about your customers and prospects. There are many good survey tools, including Survey Monkey, Constant Contact, or Zoomerang. In my previous ecommerce business, we conducted surveys that were focused on the jewelry-making industry. We asked customers and prospects about their purchasing plans for the year, what they perceived the trends to be, what specific products they expected to be buying, where they were likely to buy them, and why. We also asked their age, income, experience, and level of involvement and experience in the jewelry-making industry. We typically received only general information, but we also received very detailed demographic information. As a result we were very informed about our customers.
You can solicit input and promote your survey to your existing customers in a newsletter or a link in your transactional emails. You can also promote your survey in Facebook on your Fan page or through Facebook ads. Tweet about it. Offer an incentive such as a discount or some type of drawing for a gift certificate.
Other valuable sources of customer information include tools like Quantcast and Google’s Double Click Ad Planner. Both of these tools will show you demographic information, audience interests, and other websites that are similar or have some level of affinity for the audience. They also provide site traffic information, which is useful in sizing your market opportunities. Both tools have free versions.
Other tools like Compete and SpyFu will help provide competitive marketing strategies. This can be useful as you research both market size and keywords that are being used to search for the types of products you are selling. The free versions provide limited information. I suggest using them to gather your research. You may want to invest in a subscription, however, as you plan your marketing strategy.
Once you’ve done your research, it’s time to develop strategies to reach your prospects and offer the products they want, at the right price. The first question to ask is if you should target multiple segments with the same online store. That will lead to deciding how to group products, set up your navigation and your theme.
Specific strategies for sales and marketing also involve the other elements of a business model: channels, products and services, pricing and cost models, and organizational structure. I’ll explain more about strategy development in the coming weeks.
Knowing your customers and prospects should be the starting place for any type of business. Do your research and you may identify new opportunities, new competitors, and new ways of reaching your potential buyers.